Correlation Analysis Between DOW and PowerShares

This module allows you to analyze existing cross correlation between DOW and PowerShares SP 500 Quality ETF. You can compare the effects of market volatilities on DOW and PowerShares and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DOW with a short position of PowerShares. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and PowerShares.
Horizon     30 Days    Login   to change
Symbolsvs
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Comparative Performance

 Predicted Return Density 
      Returns 

DOW  vs.  PowerShares SP 500 Quality ETF

 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate about the same return on investment as PowerShares SP 500 Quality ETF. However, DOW is 1.0 times more volatile than PowerShares SP 500 Quality ETF. It trades about 0.02 of its potential returns per unit of risk. PowerShares SP 500 Quality ETF is currently producing about 0.02 per unit of risk. If you would invest  2,915  in PowerShares SP 500 Quality ETF on December 20, 2018 and sell it today you would earn a total of  28.00  from holding PowerShares SP 500 Quality ETF or generate 0.96% return on investment over 30 days.

Pair Corralation between DOW and PowerShares

0.9
Time Period2 Months [change]
DirectionPositive 
StrengthVery Strong
Accuracy97.62%
ValuesDaily Returns

Diversification Opportunities for DOW and PowerShares

DOW diversification synergy

Almost no diversification

Overlapping area represents the amount of risk that can be diversified away by holding DOW and PowerShares SP 500 Quality ETF in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on PowerShares SP 500 and DOW is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DOW are associated (or correlated) with PowerShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerShares SP 500 has no effect on the direction of DOW i.e. DOW and PowerShares go up and down completely randomly.
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